ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Property

Japan's land prices post first annual fall in 6 years amid COVID

Boost from foreign tourists fades due to pandemic border closures

Japan's land prices dropped for the first time in six years in 2020 as the COVID-19 pandemic sapped demand for hotels and houses. A dearth of tourists hit areas such as Asakusa, in Tokyo, hard. (Photo by Kai Fujii)

TOKYO (Reuters) -- Japan's land prices dropped for the first time in six years in 2020 as the coronavirus pandemic hurt demand for hotels and houses.

Prior to the pandemic, an influx of foreign tourists and low interest rate had helped boost land prices not only in big cities but also in some regional areas.

But with borders closed to foreign tourists and emergency steps to contain the virus, economic activity has slowed significantly.

Average land prices slipped 0.5% last year, down for the first time since 2015, according to the land ministry's survey.

In 2019, the land prices grew at the fastest pace since 2008.

Commercial land prices fell 0.8% in 2020, falling for the first time in seven years, while residential land prices slipped 0.4%, down for the first time in five years, the survey showed.

The ministry surveyed about 26,000 locations nationwide.

"Demand for shops and hotels has declined and uncertainty over the outlook prompted buyers to became cautious about prices, resulting in overall commercial land prices falling," said the survey.

Residential land transactions softened as wages and employment weakened, it said.

"It is too early to conclude that the trend for the land prices has changed. The coronavirus pandemic is the reason behind the price falls but we will need to monitor more," a land ministry official told reporters.

The broader decline has extended to the country's prime real estate markets, the survey found, with Japan's most expensive location, a spot in Tokyo's Ginza shopping district, posting its first price decline in nine years.

The cost per square metre in the location, which hosts Yamano Music and sells musical instruments, fell 7.1% to 53.6 million yen

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more